* Schlumberger quarterly earnings edge past analysts' estimates
* Baker Hughes profit misses Wall Street view
* Baker shares drop 5.6 percent; Schlumberger down 1.1 percent
By Braden Reddall
Oct 19 (Reuters) - Steady growth in drilling activity outside North America gave a big lift to Schlumberger Ltd , the world's largest oil services company, but the U.S. natural gas slump weighed even more than expected on rival Baker Hughes Inc.
Baker, the industry's third-largest player worldwide, posted a lower-than-expected quarterly profit on Friday, sending its shares down nearly 6 percent. Schlumberger's earnings per share beat analysts' estimates by a couple of cents, but its stock fell more than 1 percent amid an oilfield services selloff.
Profit margins at Baker suffered from a slump in North American pressure pumping, used in hydraulic fracturing. Both it and Schlumberger had less work and weaker pricing power in that market as depressed natural gas prices pushed the number of U.S. rigs targeting the fuel to a 13-year low.
On top of that, Baker said Canadian activity was nearly 30 percent lower than a year earlier, while the total rig count in markets such as Brazil, Colombia and Norway fell 17 percent in third quarter from the second.
But both Schlumberger and Baker said they expected activity in international markets to rebound in the current quarter, despite recent signs from industry data that global oilfield activity could be slowing because of uncertainty about the world economy.
The latest count of active rigs outside North America, as measured by Baker, is up just 6 percent this year at 1,254, and the company now expects the full-year average to be only 3 percent higher than in 2011.
Schlumberger Chief Executive Officer Paal Kibsgaard said a steady upward trend in international pricing had continued in the third quarter, and he maintained a forecast for 10 percent growth in international activity for this year.
"We maintain a positive outlook on the international market and we see growth in 2013 as well," Kibsgaard told analysts on a call, targeting a double-digit increase in earnings next year.
Nearest rival Halliburton Co, the U.S. market leader and the top fracking company, had already reported a weaker-than-expected third-quarter profit on Wednesday.
Schlumberger, which is based in Curacao and has major offices in Paris, The Hague and Houston, said its net income had risen 9 percent to $1.42 billion, or $1.07 per share, from $1.30 billion, or 96 cents per share, a year earlier.
Excluding special items, earnings came to $1.08 per share, while analysts on average expected $1.06, according to Thomson Reuters I/B/E/S.
Revenue increased 11 percent to $10.61 billion, compared with the analysts' average estimate of $10.68 billion.
"The company showed clear differentiation versus their peer group, especially with respect to North American results," Barclays analyst James West said in a note to clients.
Houston-based Baker Hughes, like other North American oil services companies, had the added burden of a short-lived spike in prices this year for guar, a key fracking fluid ingredient.
The company's third-quarter net income fell 60 percent to $279 million, or 63 cents per share, from $706 million, or $1.61 per share, a year earlier.
Excluding charges for internally developed software and other information technology assets and for closing a chemical facility, Baker's earnings of 73 cents per share missed the analysts' average estimate of 84 cents.
Revenue rose 3 percent to $5.23 billion, while analysts had expected $5.44 billion.
UBS analyst Angie Sedita said Baker's international margin of 12.1 percent had fallen short of her estimate. The company, which touted an improvement to 15 percent in the fourth quarter of 2011, said on Friday it expected this quarter's international margin to be flat with or down slightly from that level.
Shares of Baker fell 5.6 percent to $44.47 in morning trading, and Schlumberger was down 1.1 percent at $74.00.
At Thursday's close, Baker was down 3 percent so far this year. Halliburton was up 3 percent, while Schlumberger had risen 10 percent.